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PTFS to launch quality-based fee structure

Personal Touch Financial Services is introducing a new fee structure based on quality of business next year.

From 1 February, firms will be charged a new network fee, initially based on their quality of business as of 31 December this year.

PTFS says member support fees will drop 17 per cent, with two-thirds of firms paying less overall next year.

The cost of PI cover has risen with higher fees for members, but PTFS says it is now subsidising PI for members by £250,000.

Quality of business will be reviewed quarterly and work on a “green”, “amber” and “red” system.

For firms that are rated as amber or red there will be an increase of 5 per cent and 15 per cent respectively in retention rates that will apply until the firm returns to green status.

The rate will initially be calculated on advice quality of the firm. Breaches and complaints will then be measured throughout 2015 to implement in 2016. The advice quality for mortgages and protection will be rated separately to investments and pensions.

Personal Touch marketing director David Carrington: “The whole concept of the traditional network model has been shown to have failings in recent times but our new strategy of ensuring the best adviser firms with high quality standards are rewarded and not forced to over-pay and subsidise others is something we believe will provide greater clarity and fairness.

“Over the past year we have continued our commitment to reduce overall business costs whilst delivering service improvements – such as ensuring all advisers were fully prepared for Mortgage Market Review and launching a new and continually evolving fact find.

“Our ability to attract and retain advisers whose ethics and culture match our own desire to put quality first is paramount to our future success and profitability. The majority of our advisers will find their new fees are lower for next year and we will work with those that may see a small increase to improve their quality ratings and bring their fees down as quickly as possible.”

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18th December 201812:39 pm

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